The last step in the production of the amyloid-beta peptide (Abeta), the primary component of the characteristic cerebral plaques of Alzheimer's disease (AD), is intramembranous proteolysis of the Abeta precursor protein (APP) by gamma-secretase. This protease long eluded identification because of its complexity. Nevertheless, the past few years have seen considerable progress toward understanding the biochemistry of gamma-secretase. Specifically, we and others have found that gamma-secretase is inhibited by substrate-based analogs containing aspartyl protease transition state mimics; the multi-pass Presenilins (PS), mutated in familial AD, contain two conserved transmembrane aspartates essential for catalysis; an apparently identical protease cleaves the transmembrane domain of the Notch receptor as part of an essential signaling pathway in cell differentiation and embryogenesis; PS is the target of transition-state analog (i.e., active site-directed) inhibitors of gamma-secretase, strong evidence that the active site of the protease resides in PS; affinity purification of gamma-secretase activity with an immobilized inhibitor isolates not only PS, but also three other components essential for activity: Nicastrin (NCT), Aph-1, and Pen-2, and overexpression of these four proteins leads to increased gamma-secretase activity; the protease apparently possesses an initial docking site for substrate on the outer surface of the complex that is distinct from the active site; and helical peptides based on the APP transmembrane domain can potently inhibit the enzyme, apparently through interaction with the initial substrate docking site. Gamma-secretase is a founding member of an emerging family of intramembrane proteases that apparently have their active sites embedded in the lipid bilayer. Despite the remarkable progress, much remains unknown about this unusual and important protease. Toward advancing the biochemistry of gamma-secretase, our long-terms goals are to understand the structure, function and mechanism of the protease complex and how disease-causing PS mutations alter its activity. With these goals in mind, we propose to address the following specific questions: (1) How are the components of gamma-secretase arranged in the complex? (2) What are the determinants for substrate-protease recognition? (3) What is the role of Aph-1 and NCT in the assembly and activity of the protease complex? (4) How do mutations in PS that cause familial AD alter the specificity and activity of gamma-secretase? [unreadable] [unreadable]